Goldman Sachs On Burlington Stores: Wait For Pullback, Recent Outperformance Leaves Limited Upside

Stephen Grambling of Goldman Sachs downgraded shares of Burlington Stores Inc (NASDAQ: BURL) on Wednesday as recent outperformance leaves limited upside to the analyst's $46 price target.

“Burlington Stores still has a meaningful opportunity to improve sales productivity, margins and return on invested capital versus peers through improved assortments,” Grambling wrote in a note. The analyst adds that the company should benefit from falling fuel prices, however the recent outperformance in shares implies only 5 percent upside to the price target.

Grambling raised his fiscal 2014 earnings per share estimate to $1.66 from a previous $1.65 and also raised fiscal 2015 and 2016 estimates to reflect “ongoing topline momentum.” The analyst also expects the company to see EBIT margin and return on invested capital converge with peers like TJX Companies.

Bottom line, a Neutral rating reflects a limited upside in shares and the analyst is looking for a pullback to become “constructive” again.